Counterparties: Spanish bond yields relief
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France, and more crucially Spain, sold a total of $17 billion in debt, with each country meeting its targeted amount today. The rate on the 10-year Spanish benchmark rose to 5.74 percent from 5.40 percent at its last auction in January.
Failure in either auction, or a crippling interest rate for Spanish debt, would have been disastrous. The successful government bond auction came in the wake of news that the ratio of non-performing loans is increasing.
In Washington, the IMF’s Christine Lagarde made comments indicating that all is not, in fact, well:
International Monetary Fund Managing Director Christine Lagarde said she expects more contributions after landing pledges of about $320 billion in her campaign for bigger reserves to combat threats to global growth.
“I look at this pot of money as an umbrella,” Lagarde said today on Bloomberg Television’s “InBusiness With Margaret Brennan” in Washington before meetings of the world’s finance chiefs. “There are clouds on the horizon.”
Europe avoided an immediate pitfall but still needs additional resources to stabilize itself. Lagarde and other European leaders once again walked the line between soothing global markets and spooking them. It’s a position they’ve been in before, and if they are right about needing a larger firewall, one they will be in again. – Ben Walsh
On to today’s links.
Our “risk on, risk off” markets have become dramatically more correlated – FT Alphaville
Visualizing risk: Can we do better than heat maps? – The Guardian
Convict labor is back in the US – Salon